Stocks in the rare earth group are seeing continued upside Wednesday as traders are getting wind of more evidence Chinese authorities will indeed tighten regulations on the production of these rare earths. While the rumor was first heard on Tuesday, a report from Xinhua is sparking further interest this morning.

Following a 3.6 percent jump on Tuesday, Molycorp (NYSE: MCP) shares are up 6.5 percent to $22.02 at last check. Elsewhere, Rare Element Resources (AMEX: REE) shares are up 6.8 percent and shares of Avalon Rare Metals (AMEX: AVL) are up 9.7 percent.